Developing a retail central bank digital currency (CBDC) system is a significant undertaking and there are many areas that central banks need to explore including: How to improve public-private sector collaboration? How to maximize interoperability, encourage competition and enable adoption? How might retail CBDC meet current and future consumer needs in a fast-changing payments landscape?
Project Rosalind, led by the Innovation Hub’s London Centre, aims to help answer some of these questions. The project is named after British scientist Rosalind Franklin, whose work was key to understanding DNA sequencing.
A joint experimentation with the Bank of England, Project Rosalind aims to develop prototypes for an application programming interface. Based on a two-tier distribution model (central bank at the foundation of the retail CBDC system and customer-facing activities carried out by the private sector), the objective is to explore how this interface could best enable a central bank ledger to interact with private sector service providers to safely provision retail payments.
It will also explore some of the functionalities required to enable a diverse and innovative set of use cases to be developed by the private sector. Through this experimentation, the project aims to study how best to lay the foundation for building a robust and vibrant ecosystem.